We have a similar situation.
We found that the garage that services and MOT's can cost you dearly. We did have it serviced by a main dealer at one time, and I'm convinced we got fleeced and that things got replaced that didn't need it. We now have a great local private garage run by 2 older guys. Great service, and we don't get fleeced.
With the cambelt now replaced, I wouldn't sell just yet. Bear in mind that your new £5k car will depreciate by probably £1k in the first year, and could also still cost you dearly at the MOT. You're buying an unknown. Also, the value of your car isn't much anyway, so you aren't recouping much by selling it.
Here's what we do, bearing in mind we know that it's only for a few years.
Don't get it serviced, only replace what fails at the MOT. A service is only really an oil change, which helps in the long term (this assuming that you have had it serviced regularly up to now). But, keep all the fluids topped up.
Find a good private garage.
Earmark the money for your next car, and regularly think about what you might want to buy. If a massive bill comes in, you have the money, and know what to buy. If you're prepared to travel, and you know exactly what you want and have the money, you can buy any car you want in 24 hours off autotrader.
Think about what you might buy just before the MOT, just in case.
The catalytic converter isn't really likely to fail. Just give your car some fuel additive and an
Italian tuneup before the next emission test (MOT). Most diesels get carboned up due to not getting a good run.
That's what a true moustachian would do, hope it works out for you. But, that's without seeing your car, or knowing your circumstances.